Major tax reform plan goes to public

AUGUSTA, Maine(NEWS CENTER) - Just as the Maine Legislature is trying to figure out how to balance a new state budget, a bi-partisan group of lawmakers has unveiled a major tax reform plan.

The proposal is the work of five Republicans, five Democrats and one Independent who call themselves the "Gang of Eleven". Their plan is already generating plenty of talk around the statehouse.

The tax reform plan would increase the sales tax by a penny, and expand the tax to cover just about everything consumers buy, including groceries and services such as hair-cuts and car repairs. It would raise the taxes on meals and hotel rooms.

But the plan would also cut the state income tax rate in half, and give a big property tax break to Maine resident homeowners. Supporters say it would reduce the total tax bill for just about every Maine resident, and would also help boost the state's overall economy.

Opponents and some business lobbyists say there are lots of questions not answered yet, and wonder whether the plan is really about finding more money to balance the new budget. They also question whether there's enough time remaining in the Legislature to deal with such a complex plan.

Supporters say their plan will help the new state budget , but say most of the revenue from the sales tax hike will go to reduce the income tax and cover the property tax breaks. Supporters say they've met with the Governor and are meeting with individual legislators to explain the plan in detail.